Tag Archives: hours of service

Well folks, it’s official, on December 10 the Federal Motor Carrier Safety Administration announced the long-awaited final rule regarding interstate truck drivers and electronic logging devices (ELD). The rule, which will go into effect in 2017, details specifications and mandates regarding ELD usage. The moral? Get ready to say goodbye to paper logs.

According to Transportation Secretary Anthony Foxx, “This automated technology not only brings logging records into the modern age, it also allows roadside safety inspectors to unmask violations of federal law that put lives at risk.”

It’s easy for someone to throw a few soundbites out there, but what does the ELD rule actually mean for truckers? And has the writing already been on the wall for a while now? Let’s dig a little deeper.

A Story of Logs

The fact is, complex logs for on- and off-duty truck drivers have been made with pencil and paper since 1938, and are very hard to verify. Although ELDs originally hit the scene in the 1980s, it’s been a story of trial-and-error regarding their adoption.

Early adoption of ELDs came under a very different Hours-of-Service (HOS) regime. But still, the problem of unexpected occurrences remained.

During the time of paper logs, any delays, whether it be traffic, unloading, or spending too much time in the bathroom, compromised the round trip. If everything went perfectly the trucker would return with a few minutes to spare.

When things went less smoothly, however, truckers could make minor adjustments to their paper logs to account for the irregularities of life. It wasn’t cheating, per se, perhaps only 10 – 20 minutes’ worth of adjustments, but illegal just the same. With ELDs, the paradigm shifts.

A Cautionary Tale

The transition to ELDs will be hardest for smaller fleets that don’t have the capacity to relay or repower loads whose truck drivers have expired the available time on the clock. But even larger fleets have not been without their share of problems.

One well-known 300-truck fleet who does retail store deliveries for big-box retailers implemented ELDs in the late-80s and suffered greatly for it in the beginning. The fleet knew that ELDs would make it impossible to adjust for delays, so they created a video explaining to their customers how the HOS rules and ELDs would impact the operation.

The company also let its customers know it intended to increase its rates 10 percent across the board and pay that 10 percent to its drivers to make up for lost miles or revenue. Furthermore, it announced it was going to add a day to most of its delivery times.

What happened? They immediately lost 40 percent of their business within the first few months, although all of their truck drivers stayed. But within a year, after ELDs became more commonplace, almost all of their customers returned and were happy to pay the higher fee for excellent service.

How to Prepare

The good news is that fleets have between now and 2017 to prepare. They will need to work closely with their customers to ensure a smooth transition without a major loss of business. Small fleets will have to successfully adapt to the new reality and ensure their customers are on board with them.

The fact is little adjustments can add up in a big way. While truck drivers may use a few hours of potential driving time as a result of ELD adoption, the primary question is when those hours will disappear. Quite frankly, it could mean the difference between a quick repositioning or an annoying layover, or perhaps making the delivery one day before you normally would. These kinds of changes can have a net reduction in operating time and make a big impact.

For small fleets who are worried these changes will put their business model at risk, there is one surefire way to make sure the rubber stays on the road. Start logging your paper logs as you are now, while you have a chance to work out the problems associated with no leeway. Don’t wait until the new rule is already here to take the action you should make today.

It’s true that 2015 has been a year of opportunities for trucking. But just as we’re talking about an industry hitting the $700 billion revenue target, headwinds remain.

Freight demand is higher than ever, yet trucking is facing challenges on several fronts. Increased recruiting expenses, truck purchase and maintenance costs, regulatory burdens, and lost productivity are all stressing forces on fleets. Today we’re going to take a closer look at each area trucking needs to focus on as we move into the latter half of the year.

Recruiting New People

We’ve been talking about it nearly non-stop, and there’s a reason why. The truck driver shortage is real. According to the most recent numbers from the American Trucking Association (ATA), the nation needs roughly 96,000 truck drivers per year, just to keep up with demand.

If these continue as they are now, expect that number to swell to 240,000 by 2022. While there are a number of factors contributing to the shortage, overall it remains a vexing problem.

Budgets for fleet recruiting departments have also risen. As the employment situation begins to get direr, carriers are increasing their sign-on bonuses and mileage pay as they struggle to put truck drivers in a cab.

Regulatory Burdens

Fiscal pressures are increased when regulations tighten. Fleets have had to deal with a number of changes in the Hours-of-Service (HOS) model. Each change brings a shift in productivity and an adjustment to the schedule.

Several other regulatory changes might also further constrain trucking. The Environmental Protection Agency (EPA) and National Highway Transportation Safety Administration (NHTSA) are set to release new standards aimed at reducing fuel consumption in Class 8 trucks by 29 percent, between the 2014 and 2018 model years.

This change could result in the cost of buying and maintaining a new rig increasing exponentially. As things get more complicated under the hood, expect them to get more complicated in the wallet.

Lost Productivity

As HOS and other regulations have worked their way through the system, driver and asset productivity have fallen. After all, fleets must view both their equipment and their truck drivers’ time as perishable commodities.

Although HOS has been placed on ice by a Republican Congress, like any high-investment, low-margin machine, big rigs and trailers need to be kept in continual productive motion. In order to keep the bottom line from feeling any negative impacts, fleet managers are segmenting their drivers’ time.

Another major productivity problem is in wait time. As shippers get squeezed due to a lack of capacity, truck drivers often find themselves spending a disproportionate amount of time waiting at loading docks.

Rail Problems

Trucking isn’t the only industry grappling with a rapid increase in freight volumes. Service recovery on the rail lines has also stalled. Intermodal, carload, and grain movements have all seen year-over-year growth in the double digits.

While some may be quick to think the problem lies in the rail itself, this isn’t so. Railroads continued to see heavy investment through the recession, and today the investment activity going into maintaining the system is still at record levels.

The problem with railroads is one trucking is quite familiar with. There simply aren’t enough crew members out there to fill an employment void. Additionally, new EPA regulations mean there will be only one locomotive manufacturer until 2017, which could squeeze supply.

Capacity Crisis

The fact is, the market is at a capacity tipping point. The strength of demand doesn’t look to ease anytime soon. At best, seasonal peaks and/or unknown events could cause series of capacity crises.

Furthermore, contract rates are moving up. Total shipping costs are expected to rise further in 2016. To add insult to injury, another set of regulations is likely to hit in 2016, which could further muddy the picture.

It’s no secret that despite strong gains, trucking has some challenges to face. How well it’s able to meet those challenges depends on the actions of a number of people, from fleet managers to politicians. What the future holds is anybody’s guess.

In May of 2013 the Federal Motor Carrier Association (FMCSA) issued a notice of proposed rule making entitled “Coercion of Commercial Motor Vehicle Drivers.” At the time there was a fair amount of confusion surrounding the rule.

With the FMCSA set to unveil the final version of its rule in September, has the confusion abated? Furthermore, what exactly is this new policy commonly referred to as the “driver coercion rule?”

The Details

When this rule was first proposed, as it was written, there were various moving parts that could potentially change certain aspects of how freight is moved, tendered, and brokered by motor carriers. How these changes will end up being interpreted in the final rule is still a question.

Though the outcome of this rule is now somewhat clouded by the reversal of the hours-of-service rule earlier this year, there are other questions that remain. The hours of service tie-in to the coercion rule is not the only piece that still needs to be ironed out.

The Current Questions

Though the 10 page rule is filled with bureaucratic language, parsing it reveals the methodology used. In one section it adds that an act of coercion by a carrier, shipper, receiver, or transportation intermediary doesn’t mean the driver no longer has to comply with the rule, which makes sense.

Then it goes on to explain that the definition of coercion prohibits the aforementioned parties from withholding future business from a driver if he or she objects to operating while in violation of safety regulations. This threat to withhold business wouldn’t constitute coercion unless the driver objects to operating the vehicle for reasons related to hours of service and other regulations.

Here’s an example of how this rule could be put into practice. A shipper calls a motor carrier about a shipment and the carrier agrees to the run. Let’s say a driver then arrives and tells the shipper that he doesn’t have enough hours to make the run. This then puts the shipper in a predicament.

What responsibility will a shipper have for validating that the driver has sufficient time to fulfill the commitment? If the shipper asks the driver to still take the run, this could be viewed as coercion. If the shipper intends to call another carrier to handle the load, this could also be viewed as coercion by financial threat.

Many in industry are speculating as to what level of severity the onus to “know what you should have known” is placed on the shipper, receiver or anyone else engaging with the truck.

What’s Next?

Some analysts predict that this rule could prevent brokers and shippers from pushing carriers to break the rules and speed limits. They purport that this would impact small carriers, reduce capacity, and drive labor away.

Others feel that it might actually increase freight brokerage because shippers are going to want to put as much distance between them and the rules as possible. At this juncture neither side is sure how it will all play out.

The FMCSA has not articulated how the suspension of the hours of service rule now affects the coercion rule. There may be little change considering HOS isn’t the only safety regulation that could potentially be violated during the course of a job.

Violations of the truck driver coercion rule could result in fines of up to $11,000. The agency would also reserve the right to suspend, amend, or revoke the registration for a for-hire carrier, broker, or forwarder. As we get closer to September, more information regarding how the agency plans to roll out the rule should be forthcoming.